Hopes escalate for Suntec REIT's performance recovery

The worst is likely over, says analyst.

OCBC Investment Research remains positive on Suntec REIT’s performance. 

While its 2Q13 NPI and distributable income were down 38.5% and 18.7% YoY respectively due to the concurrent execution of Phases 1 and 2 of the remaking of Suntec City, OCBC believes that the worst is likely over given that Phase 1 enhancement works were completed in Jun and the retail space there has since become operational.

Here's more from OCBC Investment Research:

Committed occupancy for Phase 1 has improved to 99.6% from the precommitment of 96.7% achieved in 1Q, whereas passing rent of S$13.99 psf pm was also significantly higher than the rate of S$11.31 for the rest of Suntec City Mall and S$12.59 projected for the whole project.

Together with the continued strength and active lease management at its office segment, we are hopeful that any volatility in Suntec REIT’s financial performance is likely to be cushioned as it commences its Phase 3 (last phase) next year.